The stock market fell on Friday as semiconductor stocks slumped and Treasury yields surged following a stronger-than-expected jobs report, signaling the possibility of Federal Reserve rate hikes later this year.
The S&P 500 dropped 1%, while the tech-heavy Nasdaq Composite fell 1.6%, dragged down by a sell-off in chip stocks. The Dow Jones Industrial Average declined 0.3%.
Semiconductor stocks led the declines. Broadcom fell about 3% after tumbling more than 12% on Thursday following disappointing earnings guidance. Marvell Technology dropped more than 8%, while Micron Technology was down 6%. Nvidia, the largest company by market value, fell 1.5%, while Intel, AMD and other chipmakers dropped between 2% and 3.8% in premarket trading.
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The jobs report released Friday morning showed the U.S. economy added 172,000 jobs in May, well above the 80,000 expected by economists. The unemployment rate held steady at 4.3%, in line with expectations.
The stronger-than-expected employment data pushed Treasury yields higher as markets priced in the possibility of Federal Reserve rate hikes before year-end. The 10-year Treasury yield jumped above 4.5%, while the 30-year yield advanced above 5%. According to CME FedWatch data, markets now expect an 85% probability of a quarter-point Fed rate hike by year-end, up from 60% a week earlier.
Gains in semiconductor stocks had been instrumental in Wall Street’s recovery from March lows to record highs earlier this week. A temporary ceasefire in the Middle East and strong earnings growth had supported the rally, but momentum in AI-linked semiconductor stocks now appears shaky as investors grow cautious about crowded positioning and looming liquidity events.
The moves came as investors digested implications for monetary policy under new Federal Reserve Chair Kevin Warsh, who takes charge of an economy grappling with elevated inflation partly driven by Middle East conflict-related energy shocks and a labor market marked by recent layoffs and hiring slowdowns.
The S&P 500 is down less than 1% on the week, on track for its first negative week in 10. The Nasdaq Composite is heading for a roughly 2% loss for the week, while the Dow is poised to end the week up less than 1%.
Sources
- Reuters — confirmed semiconductor declines (Broadcom, Intel, Micron, AMD, Nvidia losses), S&P 500 and Nasdaq futures weakness on June 5, 2026
- CNBC — reported S&P 500 dropped 1%, Nasdaq fell 1.6%, nonfarm payrolls increased 172,000 (vs. 80,000 expected), 10-year yield jumped above 4.5%, 30-year yield advanced above 5%, CME FedWatch Tool data showing rate hike expectations
- Trading Economics — confirmed 10-year Treasury yield movement on June 5, 2026
